Last month, we talked about the planning stages.
Now it’s time to make some decisions about setting up our
wholesale shirt laundry.
There are many issues. I will attempt to cover
them all here, but I will surely fall short. There will be
circumstances that are unique to you, your plant and your geographical
location that I can not possibly address, but I think that my
contributions will get you on your way.
Where will we locate this shirt laundry?
I think that the first place that should be
eliminated is your current drycleaning plant. We are trying to be
specialists who set-up a specialized facility to service a specialized
need. Jamming an old Unipress BASF-A, using a shoe-horn and a crowbar,
into an area in the back of your plant where you used to store spent
filter cartridges isn’t what I had in mind.
Geographically, a wholesale shirt plant works best
in a blue-collar area where the labor market is ripe with people who do
blue-collar jobs. This is not the area amidst your customer base. It
probably is not in the same city or part of town where your drycleaning
plant is now.
One of the possible reasons that you will get
other drycleaners to send you their shirts is because these drycleaners
are in an area where many people want shirt service, but for that very
reason there are not many folks in that community that wish to press
shirts for a living.
A drycleaner may need to pay $15 to $20 for a
drycleaning presser, but will loathe paying that for a shirt presser.
Enter the wholesale shirt laundry that is established in a community
where $7 per hour jobs are a reality.
If you set up this laundry in your drycleaning
plant, you will never have the ideal shirt plant. It will always take a
back seat to the drycleaning. It will never run as a separate entity.
You will never be capable of truly determining your cost per shirt. You
will lie to yourself about it. The shirt plant will siphon profits from
the drycleaning. Each will ride the coattails of the other.
Being in a separate facility will allow you to be
far more successful at getting customers because you will be seen as a
specialist, not as a ham-and-legger doing shirts on the side.
Perhaps you have made a decision about what kind
of building you wish to locate in. Rent or buy? It is hard for me to
make this call. I am sure that there are tax ramifications of which I
am unaware. I can not reach this verdict for you, but consider these
guidelines and then my suggestion, which is probably something that
you’ve never considered.
Forget about retail space and the high price tag
that goes with it. You may be tempted to set up a retail counter.
Forget about it. For one thing, you are in a blue collar area that will
not generate many shirt customers.
Secondly, any additional mark-up for the retail
work will simply be eaten up by the counter staff and/or the space that
the counter consumes. Additionally, potential clients will prefer that
you aren’t in the retail business. If you were, the feeling is
always that the retail work is primary and the wholesale is secondary.
Not a good impression for someone alleging to be a specialist in
wholesale.
So then, we eliminate all the strip malls and
other rental spaces that need businesses that depend upon traffic count
and walk-by pedestrians.
How about an industrial park? Well, they are
generally not cheap. Figuratively speaking, what the high-rent rate is
buying is permission to do anything that you want. Noise, traffic,
etc., nobody cares. A shirt laundry uses soap and water and it
doesn’t scare away landlords like perchloroethylene. There may
not be a good argument for hiding in an industrial park and paying
extra for it.
In my city, there are lots of old mill buildings
left vacant from the days when we were heavily into textile
manufacturing. The space can be had for $1 a square foot, but the
ground floors are fully rented and have been for years. There are acres
of third- and fourth-floor space. That isn’t too convenient.
Perhaps we can do better.
Long gone are the days of commercial laundries.
Forty years ago, there were few homes with washers and dryers. A route
man would come to your house and pick up your dirty laundry and
everything would be pressed. From boxer shorts to handkerchiefs to bed
sheets to shirts. Every laundry had, literally, tons of equipment to
press the oddest of items. Have you ever seen a rotary handkerchief
press? There are still a few laundries in well-to-do communities that
have them today. (I suppose that at one time there were competing
brands of handkerchief presses.)
Anyway, what I am getting at is this: There are
many medium to large cities that have perhaps several commercial
laundries that have downsized considerably because consumer needs have
changed over the years. My city of 90,000 people had six such laundries
30 years ago and now has one, and it is very small.
Half of those also housed a drycleaning plant. The
buildings are now over-sized since they used to contain a mangler, a
sheet folder, dozens of hot-head leggers and about a dozen metric tons
of other out-dated equipment.
Suppose you rented otherwise unusable, unrentable
space from the drycleaner who closed or downsized his commercial
laundry? Suppose you buy utilities from him too? Suppose you pay him a
nickel or a dime for every shirt that you process for use of his steam,
water and electricity?
If you are only doing a few hundred shirts a week
that hardly amounts to much, but it becomes a very nice arrangement
when you’re processing 15,000 to 20,000 or more shirts per month.
Doubt that you could negotiate this? Think again.
I’ve done it twice — plus, after the second time there was
a third guy trying to persuade me to move to his plant. And his was
simply an ordinary drycleaning plant with a little extra room. He
figured that if I moved in, he’d have an on-premises shirt
laundry with no hassles, no equipment and no headaches.
With this unique setup, you have some distinct
advantages. For one thing, you can get some legitimate square footage
for a dollar or less per square foot. When it comes to permits, utility
deposits and things like that, you can cut through about 100 miles of
red tape. You can save the start-up capitalization of a new boiler.
Sure, the possibility for snags exists, but I
believe that anything can be worked out if both of the parties are
willing. In one of my deals, I made additional small payments, on a per
shirt basis, for wear and tear and maintenance on the equipment that I
used.
If you are out to put the screws to someone,
don’t waste your time in this business. If you think that the
landlord is out to screw you, look elsewhere. Both of you have a unique
opportunity and you have the upper hand because, at this moment, there
are more landlords than potential tenants if you are looking in the
right place. Once you have this squared away, you will have licked two
major obstacles in a very unique and cost effective way.
When it’s time to discuss equipment, I will
save that for a forum far less public than this publication. Every
brand of shirt equipment has some features that make it a good choice.
Some are better at certain things than others. Positive selection of
the brand or brands that is best for you will require a private Q&A
session.
For example, if you want a unit that is very easy
to train on because of high turnover, Ajax is an excellent choice. If
you want perfect sleeve gussets and plackets, Sankosha or Itsumi can
not be beat at this time. If you want maximum productivity —
maximum number of shirts per labor hour — I can set you up with a
Unipress and Itsumi combo that will blow you away.
Every unit on the market can do a good shirt, but
your needs, your plans for future growth and your wallet will dictate
what will be right for you. E-mail me with your details at
tailwind1@attbi.com with your particular details and I’ll be glad
to help.
What do you think is the one thing that can make
you stand out among other shirt wholesalers?
Professionalism, that’s what. Consider how
rare that characteristic is in any business. It is far more uncommon in
shirt laundering.
There are a startling number of shirt wholesalers
who actually bill their customers by simply using a spiral-bound
notebook and scribbling some numbers on a sheet of paper.
No wonder the shirt wholesaler is frowned upon and
accused of losing shirts and doing a lousy job! The self-image that he
portrays is of a disorganized struggler who can barely control the
Accounts Receivable, much less the shirts in his care.
There is only one place where you can get
customized software designed exclusively for the wholesale shirt
laundry. Get it today. The image enhancement that it gives you will be
remarkable, to say nothing of the savings. Imagine having professional
invoices, generated automatically as Bills of Lading that are later
capsulated in a Weekly (or Monthly) Statement. Or reports that can give
you virtually any figure – dollars, shirts, or whatever for
whoever whenever — at the push of a button. All of this allows
you to begin running your wholesale shirt laundry like a businessman
rather than as a glorified repairman.
Notice that the four things that we’ve
discussed here are probably four things that you have spent little or
no time on while you were thinking about setting up your wholesale
shirt laundry.
1. Instead of
rethinking everything, you may have figured that setting up your plant
in the vacant area next door was perfect.
2. Perhaps you never
considered that there may be an alternate way to buy steam and
electricity.
3. Your equipment guy
just took in a three-year -old single buck Sankosha on trade and you
can buy it for a song and a dance. “What a break!” may have
been your thought.
4. Lastly, perhaps you
did consider invoicing and felt that you have that edge over everybody
else. Your brother-in-law lost his job at Enron and was pretty good at
spreadsheets. He has offered to write something up that will look
pretty professional. So, you think that you’ll have software.
Let’s go over these four things again for a
minute.
Taking that empty store next door has advantages,
right? You’ll be right there. You save the time necessary to hunt
for a place. You already know the landlord. And let’s say
he’s cutting you a deal.
Remember: rethink everything! The empty store is
next to your existing drycleaning plant where you’ll be anyway so
you’ll always be around to monitor and manage. Sounds like a
dream come true. I say it’s a nightmare waiting to happen. It is
too much like “…Jamming an old Unipress BASF-A, into a area
in that back of your plant where you used to store spent filter
cartridges…” except there just happens to be a wall between
one plant and the other.
The problem with the wholesale shirt business is
that they, by and large, are not run like businesses. If the shirt
plant is “right there,” you will run the risk of doing
exactly what I think is wrong: spending a disproportionate amount of
time on shirts (at least at first), given the gross revenue compared
with drycleaning.
I firmly believe that your time is better spent
managing your drycleaning plant. You will agree with me sooner or
later. You will spend less and less time at the shirt plant because,
you will reason, cleaning is your “bread and butter.” Your
wholesale customers will notice that the attention to detail is
slipping, rest assured. Having the plants separated — far away
from each other — assures you of a few things:
1. You will put a
responsible person in charge because you can not be there. Provided
that you are at least an adequate manager, this is a good thing. The
person in charge will be expected to produce and obtain/retain
profitability and increase revenue in order to support himself/herself
as well as the company itself.
2. You will be forced
to run the shirt laundry like a business.
3. It will force the
management to “specialize” in what it does rather than
favoring the product that generates the gross profit.
Admittedly, these last few paragraphs assume that
the person going into the shirt wholesaling business is already a
drycleaner. This doesn’t have to be the case, of course
Just remember that, in my opinion, the
concept of shirt wholesaling is a very good one. Send shirts to a
specialist. But the problem is not in the concept, it is in the
execution. It isn’t generally executed very well.
You can do very well in the shirt laundry
business. Just remember that it’s a business, and never forget to
treat it like one.
OK, back to our four issues.
Utilities. The effort that you make to negotiate a
deal such as I describe, however difficult, will pay big dividends.
While you are building volume — it will take months, or even
years — you will still need to fire up your boiler every morning.
Whether you start it up to do 100 shirts or 2,000 shirts, that 30
minutes of pressure building in the boiler costs the same.
At 2,000 shirts, the cost per shirt is
insignificant. If you’re doing it to press for a mere hour or
two, your cost per shirt for utilities could be out of sight. It could
be a dollar! That sure blows away the nickel per shirt you may have
budgeted, doesn’t it! This proves that there is another way to
look at everything.
Getting equipment that happens to be available,
just because it is available, is a bad idea. The primary expense in
setting up a shirt laundry is the cost of operation. The cost of
setting it all up is the initial expense, not the primary one. We often
look at it the other way, reasoning that the first goal is just to
throw some things (equipment, procedures, logistics) together just to
get into business. We figure that fine tuning it comes later.
I will be quick to disagree with that. You see,
when you “throw some things together,” you essentially do
what everybody else does. Then you’ll wonder why it doesn’t
make money and, subsequently, you’ll never be motivated to fine
tune things later.
Remember that a wholesale shirt laundry works, as
long as you don’t do what so many others do. The primary expense
is the day-to-day cost of operation. The cost of labor and the cost of
utilities go on forever. These are the things that will make you
different (read: profitable), not saving a few thousand dollars on a
shirt unit at the onset.
Those “few thousand dollars” might
seem like just the ticket to get you to take the plunge into the shirt
business. I think that it is often the very thing that catapults a
newbie into the world of shirts. Certainly, logistics play a huge role
in day to day costs of operation.
Next month, we will take a look at those logistics
while we read the diaries of two shirt launderers with totally
different game plans.
Donald Desrosiers has been in the shirt
laundering business since 1978 and is a work-flow systems engineer who
provides services to shirt launderers through Tailwind Shirt Systems,
867 Spencer St., Fall River, MA. He can be reached by phone at (508)
965-3163 or by e-mail at tailwind1@attbi.com and he has a web sites located at: www.tailwindshirts.com and www.dondesrosiers.com
